Tag: public economics

Questions Related to public economics

Which among the following is a component of revenue expenditure of the government?

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Expenditure on general services

  2. Expenditure on economic services

  3. Grants

  4. All of the above

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Correct Option: D
Explanation:
Revenue expenditure are all such types of government expenditure that does not create any assets for the government or does not cause any reduction in the liability of the government. These expenditures are mainly conducted to provide smooth functioning of government activities and related services. These expenditure includes expenditure on general services, economic services and grants provided to states or member countries. 

Which type of expenditure is incurred by the government for the economic and social development of the country?

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Non-development expenditure

  2. Non-plan expenditure

  3. Development expenditure

  4. Revenue expenditure

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Correct Option: C
Explanation:
The government expenditures incurred on activities that are directly related to or results in some economic and social development of the country such as infrastructural improvement are called developmental expenditures.

Capital expenditure is majorly of developmental nature.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. True

  2. False

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Correct Option: A
Explanation:

Capital expenditure are all those expenditure of the government that either creates an asset for the government or reduce the liability of the government. For example - Expenditure on land and building, purchase of shares etc. Therefore, these expenditure are usually development as it contributes to the social and economic welfare of the country. 

Grants, a part of the revenue expenditure of the government, refers to all the grants given by the state government to the central government.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. True

  2. False

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Correct Option: B
Explanation:

Revenue expenditure are all such types of government expenditure that does not create any assets for the government or does not cause any reduction in the liability of the government. Therefore, grants as a part of revenue expenditure is a unilateral payment or transfer payment from central government to the state government in case of uncertainties.

Which of the following is/ are included in the capital budget of the Government of India?
1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.
2. Loans received from foreign governments
3. Loans and advances granted to the States and Union Territories
Select the correct answer using the code given below.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. $1$ only

  2. $2$ and $3$ only

  3. $1$ and $3$ only

  4. $1, 2$ and $3$

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Correct Option: D

Trade liberalization and a shift to market determined exchange rate regime had _______ impact on BOP.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. positive

  2. negative

  3. unfavourable

  4. no

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Correct Option: A

The improvement in current account deficit in 2000-01 was due to ______.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. dynamism in export performance

  2. sustained buoyancy in invisible receipts

  3. subdued non-oil import demand

  4. all of above

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Correct Option: D

The BOP position remained ________ in 1995-96, 96-97 and 1997-98.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. unfavourable

  2. adverse

  3. uncomfortable

  4. comfortable

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Correct Option: D

Which among the following is a type of government budget?

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Balanced budget

  2. Unbalanced budget

  3. Family budget

  4. Both A & B

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Correct Option: D
Explanation:

There are two types of budget in general. 

1. Balanced Budget: In this type of budget, government expenditure is equal to government revenue. 

2. Unbalanced budget: In this type of budget, government expenditure is not equal to government revenue. 

 (i) Surplus Budget: In this type of budget, government revenue is greater than government expenditure due to which there is a surplus in the budget. 

 (ii) Deficit budget: In this type of budget, government expenditure is greater than government revenue due to which there is a deficit in the budget. 

The budget where the government revenue is equal to the government expenditure is termed as ___________.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. balanced budget

  2. unbalanced budget

  3. constant budget

  4. none of the above

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Correct Option: A
Explanation:

Budget is an statement of the estimates of the government receipts and government expenditure during the period of the financial year. Balanced Budget is the type of budget where government expenditure is equal to government revenue.